Global shares take a breather ahead of US jobs data in record-breaking week; oil rises after OPEC+ agrees slow supply rise

Bullishness on Wall Street. Reuters/herval
Global shares traded at a record low, buoyed in part by investor optimism about the rate outlook.

Analysts said that key US monthly employment data would be used to set the tone for wider markets later.

Crude oil rose following OPEC+'s modest monthly supply increases, in defiance of US pressure.

After a record-breaking week this week, global shares eased slightly Friday ahead of the US monthly employment report. Oil prices rose as the world's top exporters agreed to modest supply increases and resisted international pressure.

S&P 500 futures rose 0.1% while Dow Jones futures were flat, and Nasdaq 100 futures gained 0.2%. On Thursday, the S&P 500 reached an all-time record closing at 63.21. However, the MSCI All-World index was 0.1% lower than its previous highs.

Solid earnings and the Federal Reserve's promise of "patience" when raising interest rates earlier this week set the stage for strong equity-market performance. Investors and traders were waiting for the Bureau of Labor Statistics' non-farm payrolls reports, which many believe will show resilience in the US economy.

Economists expect the US to have added 450,000 non-farm workers in October, an increase of 194,000 from September's reading. This was the weakest reading this year.

Michael Brown, senior market analyst at Caxton FX, stated that although it's not a significant report for the Fed considering that they have already tapered and that rate hikes are still some way off, "we can't completely discount the US job numbers."

The DAX in Europe fell 0.1% from its record highs and traded 0.1% lower after data revealed a surprising contraction in German industrial production. Due to weakness in the pound, the Stoxx 600 gained 0.1% and the FTSE 100 0.4%.

After shares in Kaisa, another heavily-indebted builder, were halted due to liquidity problems, the Chinese indices dropped in Asia. The Hang Seng dropped 1.5%, while the Shanghai Composite lost 1.0%. Tokyo's Nikkei dropped 0.6%, while Seoul's Kospi fell 0.3%.

The Federal Reserve's well-telegraphed slowing down of its asset acquisition program supported the dollar and it held steady against the Canadian dollar and the pound.

Matt Simpson, City Index analyst, stated that nonfarm payroll will be at 12:30 GMT today. However, we would need to see a significant divergence from expectations in order for it to have any meaningful impact since it comes just two days after the Fed announced tapering.

Sterling fell 0.4% against the dollar after a loss of 1.4% on the previous day, when the Bank of England unexpectedly left UK interest rates unchanged. This was the largest single-day drop in sterling's history.

Crude oil rose after the Organization of the Petroleum Exporting Countries (OPEC) and its partners agreed that they would increase joint production by 400,000 barrels per day. This was in line with the plan, despite President Joe Biden's call for a faster increase to curb energy inflation.

"Net, our bullish outlook remains unchanged: The oil deficit remains unresolved. The current strength of oil demand remains an immediate tailwind. However, the structural nature of the deficits will require higher long-dated oil prices," Goldman Sachs analysts Damian Courvalin stated in a daily note.

Brent crude futures rose 0.4% to $80.88 per barrel. However, they are still expected to lose 0.3% this week. WTI was 0.8% higher at $79.44 per barrel.